All of a sudden AI money can have an outsized effect
San Francisco has a listing convention that confuses almost everyone reading national coverage of our market. Homes here are frequently listed below what they are expected to sell for, deliberately, to generate competition and produce an auction effect on offer day. It has been standard practice for decades and it is no secret, but it does not travel well in a headline.
So when you read that a home sold twenty percent over asking, that number is not telling you what it sounds like. Sometimes it describes a frenzy. Sometimes it describes a list price that was set low on purpose and a sale that landed exactly where the listing agent expected it to. Those are two different markets, and the percentage on its own cannot tell them apart.
This matters right now because AI money is arriving on top of a supply picture that was already severely constrained. San Francisco is geographically small, a high share of residents rent, and we have struggled for years to build. When significant new demand meets very little inventory, the effect on prices is amplified well beyond what the amount of money alone would suggest. That is what I meant about an outsized effect.
For a buyer, the practical implication is that you cannot price a home from its list price. You have to work from what comparable homes actually sold for, and it helps enormously to know whether a particular listing agent underprices as a matter of habit.
For a seller, the implication is that the strategy has to be chosen on purpose rather than by default. Underpricing works when it produces multiple offers. When it does not produce them, you have anchored the conversation low and handed away your leverage.
Related: San Francisco Real Estate Market Update: What to Know Before Spring 2026
